T was brought into our lives in July, 1999. We were so excited and loved being parents. The idea of me being a stay-at-home mother never entered my mind. I was extremely focused on having a career. As a matter of fact, I was itching to get back to work, and did just that when he was 6 weeks old.
It's a good thing I did too.
That winter, Paul was laid off from his job. That's probably when the debt first hit us. Up until then, we really didn't have debt other than the house and car payment. Sure we had some stupid financial mistakes already but no debt since we both had well paying jobs. When Paul was laid off and it was me being the primarily bread winner for the family, it strapped us. It caused an emotional strain on our relationship too.
During this, we knew we should tighten up and not spend as much, but our spending behaviors never changed, credit became our friend. Paul was getting unemployment and we were still paying our bills (luckily, we have never been late on a bill). But, those luxury items we were used to like eating out and shopping for unnecessary things, were paid for mostly with credit.
As I mentioned before, Paul just had his Associate Degree. It was always in the plans for him to complete his Bachelor's so he took his layoff as a time to do that. He received an extension on unemployment as he focused on school. We did incur student loan debt. We saw that debt as a “gotta spend money to make money” thought.
I still agree with that philosophy since an education is something that you will need and should help you achieve goals and provide a better financial future. I know many may disagree with that thought, and that's fine. I worked in HR for years, and we would rarely hire someone without a college degree. With today's economy and talent surplus, it is even harder to get a foot in the door today.
During this layoff period, I was under an immense amount of pressure as the primary breadwinner for our family. If you have never been in that situation, it is tough. Unfortunately, our marriage suffered..a LOT! We were both going in to separate directions. We weren't communicating at all, let alone about finances! I was resentful to my husband since I had to go to work everyday. I knew what he was doing was going to help us in the long-run, but I didn't see it. A man has so much identity in his work. Obviously he wasn't excited about not working either. I was overall annoyed.
Yes, I was somewhat immature. We are happier now than we have ever been and grateful for that trial. I will elaborate in a future post :)
I guess I wasn't too immature because I decided I wanted to finish my degree too. So, I did just that. As I worked full-time, my husband went to school in the evenings, after all of the mommy stuff was done late at night, I went to school. I found a great school online that offered integrated coursework (Marylhurst University for any OR peeps). It was one of the first colleges to do online courses, now it just seems like the norm! So, I was working towards that degree, luckily my employer offered an extremely generous tuition reimbursement program so we incurred very little student loan debt.
FYI, look at all the benefits your company offers, not just the annual salary. While I was making a fair salary, the tuition reimbursement package was an amazing financial benefit. Think about the entire package of compensation and benefits.
While Paul and I were doing the school thing, he also got a random job at a Credit Union during the day. It allowed him to take classes at night. It was just something to bring in income so things weren't as tight. Eventually he finished school, got a supervisor role at a local manufacturing facility and we moved into a larger house…with a larger mortgage and PMI (YUCK!).
Here's an example of how a bank will lend you whatever they think you can afford.
We were actually considering building a home before we eventually moved into the home I just mentioned. As we finalized the building plans, we had an ending total that was crazy high! Or, at least for these two 20-somethings starting a family. I remember laying in bed one night discussing the thought. It was that night we agreed there was no way we could do that mortgage and didn't build. Luckily, the house we ended up going with was around a quarter of the price cheaper which helped reduce our payment. It was more affordable and within OUR budget, not what the bank thought our budget could be.
This was in early 2001 where EVERYONE, it seems, got approved for credit ;) We sure did too! We got approved for even more than what our home cost. Of course we didn't have 20% to put down, but we did have 10%. So, if you don't have a full 20% down, you would get to pay for PMI. Never pay for PMI! The banks made us think it was “normal.” If we would have had others guiding us, we would have realized that paying insurance on the thought of us not paying the mortgage made no sense.
I so wish Dave had written, Total Money Makeover, before I got married!
Also, as we were selling our current home, we took a loss of around $7,000. Honestly, at that point we were just glad to be done with it! But, given our income at the time, that was a huge loss to us. I'm still amazed we even had the 10% to put down on our new home. Looking back, I have no idea how we had that amount after the layoff just months before – I guess we did save some.
How many financial mistakes is that now? I've lost count!
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